2025: Another Brutal Year for Startups? Data Suggests So
2025-01-27
Data suggests 2025 could be another tough year for startups. 2024 saw a significant increase in startup closures compared to 2023, with Carta reporting a 25.6% rise to 966 closures (US-based Carta customers). AngelList saw a 56.2% increase to 364 closures. This surge is attributed to the overfunded and overvalued companies from the 2020-2021 boom. Many struggled to secure further funding after inflated valuations. Experts point to a combination of factors: running out of cash, lack of product-market fit, and inability to raise more capital due to previous overvaluation. The trend is expected to continue in the first half of 2025, gradually declining thereafter.